August 9, 2007

 

CBOT Corn Outlook on Thursday: Flat-1 cent higher; waiting on crop report

 

 

Chicago Board of Trade corn futures are expected to begin day session trading flat-to-1 cent higher as the market waits on Friday's U.S. Department of Agriculture crop production report for market direction, analysts said.

 

In overnight electronic trading September corn ended unchanged at US$3.41 per bushel, and December slipped 1/4 cent lower to US$3.57 3/4. E-CBOT volume in December was 3,576 contracts.

 

Choppy trading is expected ahead of Friday's USDA reports, a commission house analyst said. Market direction will be set by the numbers released so traders will be fine tuning their positions ahead of the release, the commission house analyst said.

 

The average production estimate for the 2007-08 crop year was 12.909 billion bushels, according to an average of 23 analysts, 69 million bushels above the 12.840 billion estimated by the U.S. Department of Agriculture in July.

 

The average yield estimate for the 2007-08 crop year was 151.2 bushels per acre, according to a survey of 23 analysts, compared the 150.3 bushels estimated in July by the USDA.

 

The weather is favorable to the crops in the northern half of the U.S. Midwest, but it remains hot and dry in parts of the southern sections of the region and could provide some support, a floor trader said.

 

In the western U.S. Midwest, mainly dry weather is forecast for most of Friday with a chance for scattered thundershowers, 0.25-0.75 inch and locally heavier, Friday night into Saturday. Temperatures are predicted to average above-to-well above normal Friday and Saturday, Meteorologix said.

 

In the eastern U.S. Midwest there is a chance for scattered showers Thursday in northern and eastern areas before mainly dry weather on Friday and Saturday. Temperatures are expected to average above-to-well above normal in the period with highs ranging from the 80s to a few low 100s degrees Fahrenheit with the hottest readings over south and southeast areas, Meteorologix Weather said.

 

In the 6- to 10-day outlook, temperatures are expected to average above or well above normal and rainfall is predicted below normal.

 

On daily technical charts, December corn hit a fresh three-week high on short-covering ahead of Friday's crop report and speculative buying interest, a technical analyst said. The bulls have regained solid upside near-term technical momentum this week, the analyst added.

 

The bulls' next upside price objective is closing prices above solid resistance at the July high of US$3.71, with the bears' next downside price objective for market bears is closing prices below US$3.36.

 

First resistance for December corn is seen at US$3.59 1/4, Wednesday's high and then at US$3.63. First support is seen at US$3.53 1/2, and then at US$3.50.

 

Weekly U.S. corn export sales were released Thursday morning and were within the range expected by analyst. The USDA reported that corn export sales for the week ended Aug. 2 totaled 1.336 million metric tonnes, within the range of the 950,000-1.5 million metric tonnes expected by analysts.

 

In other corn news, corn futures on China's Dalian Commodities Exchange settled higher with the May contract up RMB6 at RMB1,563 per metric tonne.